Eight Secret Tricks to Passing (Exam FM)

1.  Be over-prepared: The syllabus is so extensive, and there are so many twists that may be put on standard material, that there are always going to be questions that look foreign. The more that you are prepared, the more that you will be able to handle some of these. Being over prepared also helps to deal with emotions. There were points during the exam when a little voice in my head said “There is no way that you are going to pass this.” Yet, that same voice was in my head during many sample exams which I passed with flying colors. Experience and over-preparation reveals that you can succeed even when you are not at your best. If you walk into the exam center with worries, or a cold,or the flu, or pain in your back, you know that you can still succeed.

2.  Fill in the tough spots: It can hurt your head to learn new things. Identify the areas with which you struggle, and try to get your head around them. Two weeks before the exam, I still had some head-pain topics. Things like duration matching, convexity, interest rate swaps, and put-call parity. But, they were on my daily study schedule, and I forced myself to confront them each day. It paid off.

3.  Fill in the fundamentals: Once you gain proficiency in a topic, the fundamentals look different. In the month before the test, I went back and reviewed some of the basics of interest theory. At this point, the basics were easy, and I picked up on some of the finer points that I missed the first time around. Amortization schedules, for instance.  After I learned the basic formulas, it was easy to ignore the schedules they are based on. Yet many problems are made much easier by using schedules, rather than relying on formulas.

4.  Memorization is easy: Once you understand things thoroughly, you don’t really need to do much memory work for these exams. After months of working problems, most things will be anchored in your head. And yet suppose that you find yourself trapped in a dark alley by two annuities, one of which is twice as long as the other. Then you will be glad that you memorized \frac{a_{\overline{2n}\lvert }}{a_{\overline{n}\lvert }}=1-v^n I have never encountered this fact in practice, but if I did, recognizing this identity might save me a couple of minutes. Spend a little time on memory work, it is easy.

5.  Test symbolic solutions with numbers: If you have a problem with a purely symbolic solution, and you can narrow it down to a couple of possible solutions, you can frequently replace the variables with reasonable numbers, and see if the result is true. This is my favorite new solution technique I learned while studying for this exam.

6.  Read MacDonald: Actually read it. After you learn the math, go back and read it. If you look at the notes from the sample problems, you will notice that the exam writers have made it pretty clear that the exam will be based on the book. Those non-numeric multiple choice questions can be very challenging. Read the book.

7.  Number your Scrap Paper: I learned this trick when taking practice exams.  If you have time to review problems at the end of the exam, you will need to find the scratch-work easily.

8.  Practice with dull number two pencils: Two weeks before the exam, I put all of my mechanical pencils away, and worked only with old fangled sharpenable pencils. Two hours into the exam, you will be working with dull stubs, so you need to be prepared.

The Cards

Cutting them up:

cutter small

I have owned this paper cutter for 25 years.  At that time, I did not own much but the clothes on my back.  How would I have survived without a paper cutter to make little books and cards and such?

finished cards smallThings that I gained by making these cards:

  1. A strengthened knowledge of FM fundamentals.
  2. Increased fluency with LaTeX.
  3. A creative project which kept me focused on the subject at hand.
  4. A nice little pile of finished cards.
  5. Time to think about the pluses and minuses of virtual products versus actual.

 

 

Exam FM, Chapter 1 Flashcards

I just posted my nearly final version of the first chapter of flashcards for exam FM.  I added some questions on geometric progressions, and some on force of interest, so now there are 226 cards.  I know that there are still a few holes, but I will worry about that later.  I could probably come up with 300 cards for the first chapter very easily.  But, having put together several sets of study cards, I find that I add fewer cards for subsequent topics.  In almost any subject, the most vital information to commit permanently to memory is at the beginning.

I tried to use a sampling of the different terminologies.  For instance, I used the accumulation function a(t) as well as the FV, PV terminology.  When I look at the solutions for the exam sample questions, I see both types used, so I suppose that it is possible for either to appear in an examination question.

For most formulas, I give several types of numerical examples.  It is important to see the relationships at work.  To see the animals in their native habitat.

In a later post, I will describe how to use these cards to best effect.  I do intend them as a means of permanently learning the material.

 

Another Update on Exam FM Flashcards

I updated my Financial Mathematics cards again this morning. The link from a couple of days ago reflects the updates. There are now 190 cards.

The cards are in the form of a PDF file, to be printed on letter size paper (8.5 x 11 in). Many printers do not print the front and back of each page in good alignment, so I made sure not to place text too near the borders of the back of the cards.  Simply print the cards out, cut a 1cm border from around the page, then cut the cards out.  Whoops!  I have mixed inches and centimeters.  I will straighten out the unit issue on the next version, with a 1/2 inch border.

I am trying to really fill out most of the fundamentals.  This makes the cards useful not just for someone studying for the actuary exams, but also for anyone learning the basics of finance.

Let me know how the cards work for you, or if you find any errors.

Nearly done With First Chapter of Cards

I have just updated the first chapter of my Financial Mathematics cards.  (link is on post from a couple of days ago).  The deck is up to about 160 cards.  I am looking at the exam FM syllabus, plus some books, and filling in topics.  Next week the first chapter will be finalized, and I will post a permanent link on the sidebar.

Later, I will post some advice on how these cards are intended to be used.  In essence, these cards reinforce the fundamental pieces that go into solving difficult problems.  They certainly do not replace solving tough problems, or replace learning the concepts.  Often, they may suggest new ways of solving complex problems.  I intend them to be used along with a pencil, paper, and calculator.  Setting up the solution is more important than a numerical answer, however.  The numerical cards are intended more as ways of recognizing and reinforcing the fundamental equations and relationships.

Lots of people have downloaded the deck already.  Thanks!

I can’t wait to finally post my Exam P cheat sheet.  LaTeX is great 🙂

Downloadable Financial Mathematics Flashcards

I have been working hard today.  Here is a PDF of the first draft of my exam FM flashcards.  So far, they just cover “chapter 1” stuff like Interest Theory and Lump Sums.  I think that there are about 110 cards so far.  I will soon be fleshing out the missing Interest Theory topics, then I will add the Annuity cards that I have made.

I am delighted to have used LaTeX to design the cards.  They are 2 cards by 5 cards on a letter size page.  This is a standard card size, which you can buy paper for at the store.  I will add some cut marks when I figure out how.

More tomorrow.

Update on Card Formatting

Yesterday, I posted this flash card as an example:

When I did my repetitions this morning, I realized that this card, and several similar ones that I created yesterday, are too complicated.  Cards should only test one very small item of knowledge. (Read SuperMemo 20 Rules of Formatting Knowledge)  The cards from yesterday test not only the function of the “a angle n” function, but also require a calculation with this function.  A much better card is as so:

The wording of the card now makes it obvious that I am not looking for a numeric answer.  The purpose of this card is simply to help the mind to recognize and recall a common relationship that involves the present value of the annuity immediate.

 

Basic Annuities

A Nice Little Chart for Basic Annuities:

annuities immediate and annuities dueI used the image occlusion feature on my memorization software to make cards like so:

basic annuity sample cardThere is a simple, subtle, and significant difference between annuities immediate and annuities due, and these cards help to illustrate the difference.  Really the “immediate” and “due” terms are not important.  The important thing is to recognize there you are measuring from, in relation to the payments.

LaTeX in Anki

So I have LaTeX working in Anki:

Front of Card:

Let X be the number of tosses requires until the first 5 appears on a die.
\displaystyle E(\frac{1}{2^X})?
Back of Card:
\displaystyle \frac{1}{7} =\frac{1}{6(2)-5}
Geometric distribution
\displaystyle \sum_{i=1}^{\infty} \left(\frac{1}{n}\right)^i\left(\frac{1}{6}\right)\left(\frac{5}{6}\right)^{i-1} =\left(\frac{1}{6}\right)\left(\frac{1}{n}\right)\sum_{i=0}^{\infty}\left(\frac{5}{6n}\right)^i
\displaystyle=\left(\frac{1}{6n-1}\right)

I know that is a little wordy for a flash card, but sometimes I like to put a little background information on the back of a card, so I can remember how the fact is derived.  And, yes, I know that I have been carrying on about SuperMemo.  Too bad 🙂

My current Probability items for Anki

I thought that I would post my current memorization list for exam P/1 in both Mnemosyne and Anki form, but I am having trouble with the xml files that Mnemosyne is creating.  So what I have here is just in Anki form.   I don’t believe that there are any mathematical errors, however there may be some small formatting errors in the Anki file due to the conversion.  There are currently 489 items in the deck.

Anki Deck for Exam P/1

It would be great if you could let me know what you think.  I will repost perfected versions of these every couple of months.

By the way, I just realized that there are 6 cards in the deck with images that did not get transferred.  A few cosine questions, and a couple with even and odd functions.  Just ignore them for now.